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WASHINGTON--Verizon Communications doesn't currently block or slow down peer-to-peer file-sharing applications like BitTorrent on its broadband network, but it can't rule out doing so in the future, a company vice president said Monday.

Verizon Executive Vice President Tom Tauke

(Credit: Verizon)

The comments by Verizon executive vice president Tom Tauke arrive as Comcast has taken heat for throttling BitTorrent traffic in the name of "reasonable network management" and as the Federal Communications Commission is studying whether Internet service providers should be permitted to manipulate P2P traffic. Consumer interest groups have asked the FCC to declare that "degrading peer-to-peer traffic" violates the FCC's Internet policy statement, which says consumers can generally use the applications and access the Web sites of their choosing, with an exception for "reasonable network management."

Tauke, for his part, said Verizon has "more robust" networks than its cable competitors, in part because its customers have direct lines to their homes, rather than sharing capacity with the rest of their block or neighborhood.

Because of that set-up, "we see no need at the current time to slow peer-to-peer traffic," Tauke said in response to a reporter's question during a roundtable discussion at the company's offices here.

Still, he also talked at length about the importance of what he variously called "legitimate" and "appropriate" network management in ensuring the network runs smoothly for all subscribers. If, for example, large file transfers were hogging bandwidth, Tauke said Verizon might choose for a time to prioritize voice traffic, which is quite latency-sensitive, over, say, e-mail traffic, which could perhaps stand to arrive half a second later without causing great inconvenience to the recipient.

In doing any network management, however, Verizon recognizes it has to be very careful not to interfere with the transfer of "legitimate" messages (as in, nonspam material) or alter the content of any packets being sent across the Internet, Tauke said.

Tauke is the same Verizon executive who, as reported by CNET News.com last month, said his company wants nothing to do with policing for transfer of copyrighted content on its network. That position was clearly meant to differentiate his company from AT&T, which has revealed plans to try to do just that..

Ever interested in setting his company apart from the competition, Tauke implied that if Verizon's practices were to change, it would let consumers know--a clear shot at accusations by consumer interest groups that Comcast hasn't been transparent enough about its treatment of peer-to-peer traffic.

"One of the most important things is transparency," Tauke said. "Any impact on consumers should be fully disclosed."

On a related note, Tauke said Verizon still believes there's no need for so-called Net neutrality regulations prohibiting Internet service providers from prioritizing content.

UPDATE: 7:12 A.M. (1-28-08): Qtrax continues to delay the launch of its much awaited legal file-sharing site as more record labels confirm that the startup doesn't have permission to sell their music.

For weeks, Qtrax, an ad-supported P2P site, had promised to offer free and legal music downloads from all four of the major record labels when it opened for business.

But despite earlier reports, Qtrax's Web site will apparently not feature legal downloads from any of the majors when it debuts. On the eve of the site's launch, Warner Music Group and Universal Music Group said that Qtrax was not authorized to offer their music.

Both companies said they continue to negotiate with Qtrax, but emphasized that they don't have a done deal. A spokesman from Sony BMG echoed the other two companies by confirming on Monday morning that the label has not signed on to Qtrax either.

The Los Angeles Times reported on Sunday that New York-based Qtrax is also without a final agreement with the EMI Group. The blog, Silicon Alley Insider, was first to report on Qtrax's troubles.

Meanwhile, Qtrax has missed it's launch time of midnight Monday morning ET. More than eight hours later, visitors were still not allowed to download music. Robin Kent, a Qtrax marketing executive said that it might be another 24 hours before the company can enable downloads.

Qtrax CEO Allan Klepfisz acknowledged in an interview with CNET News.com late Sunday evening that his company may not possess agreements "written in stone," but that it doesn't mean Qtrax is without the labels' consent to feature their music.

"This is a tempest in a tea cup," Klepfisz said from the Midem music conference in Cannes, France. "It's true, some of the deals may not be locked in ink, but it's also true that we had understandings. In some cases, we had endorsements."

Klepfisz said it was likely the Qtrax Web site would debut featuring music from all four labels despite the public comments by UMG and Warner. Is he worried about a lawsuit?

"The answer is nobody has threatened us with a thing," Klepfisz said. "We plan to release music the way we said we were."

Qtrax's business model is based on offering people an attractive and legal file-sharing site.

The company's music offering sits on top of the Gnutella file-sharing network. Once a user downloads Qtrax's software client, they can look for songs with the help of the company's finger-printing technology.

Qtrax guarantees to protect customers from spyware or viruses that plague illegal sites. The way Qtrax makes money is by placing ads on its Web pages. The company then splits the ad revenue with the labels.

Recently, the labels have embraced ad-supported models. What they don't seem keen on are ad-supported sites that offer downloads.

For example, services such as Imeem and Last.fm, which stream music to listeners but don't allow them to download it to a computer or portable device, offer songs from all four top labels.

SpiralFrog, one of the best known services and one that enables people to download to a PC and some portable devices, has been toiling in the sector for nearly two years and has only managed to land one of the biggie labels: Universal Music Group.

Today is the official U.S. launch of Ezmo, a Norwegian Web service that allows users to post and share their entire digital music collections through a simple Flash application. ... Read more

Still worried that peer-to-peer filesharing networks like Lime Wire are causing users to "inadvertently" expose sensitive documents, posing potential security risks, members of Congress are now asking for a formal investigation into the phenomenon.

Congress wants the FTC (headquarters pictured here) to probe identity theft risks posed by peer-to-peer filesharing.

(Credit: Federal Trade Commission)

The latest concern from the House of Representatives Committee on Oversight and Government Reform, judging by a 7-page letter (click for PDF) dated Wednesday to Federal Trade Commission chairwoman Deborah Majoras, appears to be this: Peer-to-peer networks may make unsuspecting consumers vulnerable to identity theft.

The same group of politicians, led by Reps. Henry Waxman (D-Calif.) and Tom Davis (R-Va.), suggested earlier this summer that peer-to-peer networks can pose a "national security" threat by allowing users to expose sensitive information unwittingly. (Some politicians, particularly those with entertainment industries in their districts, also took the opportunity once again to condemn unlawful transfer of copyrighted content via the networks.)

The committee members asked the FTC, the federal agency charged primarily with consumer protection, to outline any risks it believes are associated with peer-to-peer filesharing and whether it specifically considered the "impact" of peer-to-peer filesharing when it devised recommendations for fending off identity theft.

The letter closes by asking the federal regulators to reveal whether they feel they have sufficient enforcement powers to "address problems associated with inadvertent filesharing"--and if not, of course, what Congress could do to help.

Lime Wire and the peer-to-peer community have long defended their services, saying they're increasingly incorporating features designed to give users clear warning before they open up, say, their entire My Documents folder to the whole world.

There was no immediate word on how the FTC plans to respond.

The bad legal news continues for the recording industry.

After yesterday's ruling that the RIAA owes an Oklahoma woman nearly $70,000 in attorneys' fees, the European Union's top court today said that European ISPs are not required to disclose the names of subscribers whose IP addresses have allegedly been linked to illegal activity on file-sharing networks.

In the case at issue, a group of Spanish music producers filed a legal complaint about Spanish ISP Telefonica, which refused turn over IP addresses of apparent Kazaa users. Telefonica maintained that Spanish law required it to turn over these addresses only in criminal cases or matters of national security. The Spanish court overseeing the case asked for an opinion from the European Court of Justice, which essentially backed Telefonica, saying that this information did not need to be turned over in civil cases.

This opinion's not a legally binding ruling, but if the Spanish court accepts the opinion and rules accordingly, this could form the basis for similar decisions throughout the EU. This would mean that recording industry representatives would either have to convince criminal investigators--the police--to go after file-traders (unlikely), or would have to come up with some other technical method (possible) without violating the EU's stringent privacy laws (very difficult).

Meanwhile, in the U.S., the RIAA continues to spend a lot of money to get very little in return.

ZuneScene, a fan site devoted to Microsoft's portable music player, is reporting on a Microsoft patent filing that describes a system for compensating Zune users for sharing music wirelessly.

(Credit: Microsoft)

The idea: if I send you a song, it expires after 3 days or 3 plays, regardless of where I got it from (my own CD collection, a file-sharing network, a Zune Marketplace download). If you decide you like that song and buy it from the Zune Marketplace, I get a small commission--probably points good for buying other songs from the Marketplace.

This isn't news: Engadget reported on it back in November, and the patent filing is from December 2005. But ZuneScene does make one interesting point that earlier commenters missed: this system would allow Microsoft (and content owners) to earn money from the huge traffic of free files on file-sharing sites and elsewhere. Zune applies copy-protection technology to formerly unprotected files, and if users decide to pay the bill, suddenly there's monetary value where there was none before. Sounds pretty appealing for content owners.

It's an interesting idea, and it certainly could help make Zune's sharing features a little less lame--the 3 days/3 plays restriction is a non-starter, but if I get a kickback for sending you a song, I might be a little more inclined to do so. But I haven't heard any confirmation that Microsoft's planning to do this, and I know there's a long list of other features they're considering adding.

For what it's worth, ZuneScene's also reporting that the next-generation Zunes--an 80GB hard drive model and smaller flash-based model--are in production and will go on sale some time in the next couple months. Again, I've heard no confirmation from Microsoft on this, but it makes sense that they'd want to get the next iteration out in time for holiday 2007.

Ohio University has become the latest college to crack down on file sharing.

The school announced this week that it would restrict the use of all peer-to-peer file sharing on the campus computer network.

"The network is a shared resource, and we must ensure that it is available to all users," Chief Information Officer Brice Bible said in a news release. "Peer-to-peer file-sharing consumes a disproportionate amount of resources, both in bandwidth and human technical support."

College students are some of the most prolific users of P2P sites, and record industry officials have attempted to crack down on the spread of these networks on campuses.

The move was predictably met with derision by most bloggers, who claimed the reasoning was specious and said students would just find a way around it.

Blog community response:

"It's a sad statement of the times that an institution designed for educating and learning about new things would decide to completely shut off any use of powerful technologies that have plenty of perfectly legitimate uses just because some backwards industry group can't figure out how to change its outdated business models."
--Techdirt

"So there; you'll have to download pirated porn or DVD rips via your parents connection when home on break."
--Broadband Reports

"If they're going to make an ethical argument, they need to clearly demonstrate the ethics involved. 'Students pirate' is not something that simply needs to be accepted as a matter of common understanding. I don't think administrators generally give students enough credit about their decision-making capabilities or rationales."
--Copy This Blog